Stocks have gained against a backdrop of low borrowing costs and a slow but steady economic recovery. However, the market may struggle to build on those gains in the immediate future as traders and investors turn their attention back to Washington, said Ernie Cecilia, chief investment officer at Bryn Mawr Trust.
The budget deal struck at the start of the year dealt with taxes, but across-the-board spending cuts were pushed back from Jan. 1 to March 1. While a showdown over the nation's borrowing limits appears to have been put off, lawmakers have yet to agree on how best to reduce government spending. Those negotiations could be protracted and increase stock market volatility, Cecilia said.
More government reports Thursday also gave investors a better picture of the health of the economy.
The number of Americans seeking unemployment aid rose sharply last week but remained at a level consistent with moderate hiring.
Investors will look for more clues about the job market's strength Friday, when the closely followed monthly nonfarm payrolls report is published.
The yield on the 10-year Treasury note, which moves inversely to its price, was little changed at 1.99 percent.